G.R. No.
82027 March 29, 1990 any payment or withdrawal made for our above-mentioned account shall be valid and
ROMARICO G. VITUG, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and ROWENA FAUSTINO-CORONA, respondents.
Rufino B. Javier Law Office for petitioner.
Quisumbing, Torres & Evangelista for private respondent.
SARMIENTO, J.:
This case is a chapter in an earlier suit decided by this Court 1 involving the probate
of the two wills of the late Dolores Luchangco Vitug, who died in New York, U. S.A., on
November 10, 1980, naming private respondent Rowena Faustino-Corona executrix. In our
said decision, we upheld the appointment of Nenita Alonte as co-special administrator of
Mrs. Vitug's estate with her (Mrs. Vitug's) widower, petitioner Romarico G. Vitug, pending
probate.
On January 13, 1985, Romarico G. Vitug filed a motion asking for authority from the
probate court to sell certain shares of stock and real properties belonging to the estate to
cover allegedly his advances to the estate in the sum of P667,731.66, plus interests, which
he claimed were personal funds. As found by the Court of Appeals, 2 the alleged advances
consisted of P58,147.40 spent for the payment of estate tax, P518,834.27 as deficiency
estate tax, and P90,749.99 as "increment thereto." 3 According to Mr. Vitug, he withdrew
the sums of P518,834.27 and P90,749.99 from savings account No. 35342-038 of the Bank of
America, Makati, Metro Manila.
On April 12, 1985, Rowena Corona opposed the motion to sell on the ground that
the same funds withdrawn from savings account No. 35342-038 were conjugal partnership
properties and part of the estate, and hence, there was allegedly no ground for
reimbursement. She also sought his ouster for failure to include the sums in question for
inventory and for "concealment of funds belonging to the estate." 4
Vitug insists that the said funds are his exclusive property having acquired the same
through a survivorship agreement executed with his late wife and the bank on June 19,
1970. The agreement provides:
We hereby agree with each other and with the BANK OF AMERICAN NATIONAL
TRUST AND SAVINGS ASSOCIATION (hereinafter referred to as the BANK), that all money
now or hereafter deposited by us or any or either of us with the BANK in our joint savings
current account shall be the property of all or both of us and shall be payable to and
collectible or withdrawable by either or any of us during our lifetime, and after the death of
either or any of us shall belong to and be the sole property of the survivor or survivors, and
shall be payable to and collectible or withdrawable by such survivor or survivors.
We further agree with each other and the BANK that the receipt or check of either,
any or all of us during our lifetime, or the receipt or check of the survivor or survivors, for
sufficient release and discharge of the BANK for such payment or withdrawal. 5
The trial courts 6 upheld the validity of this agreement and granted "the motion to
sell some of the estate of Dolores L. Vitug, the proceeds of which shall be used to pay the
personal funds of Romarico Vitug in the total sum of P667,731.66 ... ." 7
On the other hand, the Court of Appeals, in the petition for certiorari filed by the
herein private respondent, held that the above-quoted survivorship agreement constitutes a
conveyance mortis causa which "did not comply with the formalities of a valid will as
prescribed by Article 805 of the Civil Code," 8 and secondly, assuming that it is a mere
donation inter vivos, it is a prohibited donation under the provisions of Article 133 of the
Civil Code. 9
The dispositive portion of the decision of the Court of Appeals states:
WHEREFORE, the order of respondent Judge dated November 26, 1985 (Annex II,
petition) is hereby set aside insofar as it granted private respondent's motion to sell certain
properties of the estate of Dolores L. Vitug for reimbursement of his alleged advances to the
estate, but the same order is sustained in all other respects. In addition, respondent Judge is
directed to include provisionally the deposits in Savings Account No. 35342-038 with the
Bank of America, Makati, in the inventory of actual properties possessed by the spouses at
the time of the decedent's death. With costs against private respondent. 10
In his petition, Vitug, the surviving spouse, assails the appellate court's ruling on the
strength of our decisions in Rivera v. People's Bank and Trust Co. 11 and Macam v.
Gatmaitan 12 in which we sustained the validity of "survivorship agreements" and
considering them as aleatory contracts. 13
The petition is meritorious.
The conveyance in question is not, first of all, one of mortis causa, which should be
embodied in a will. A will has been defined as "a personal, solemn, revocable and free act by
which a capacitated person disposes of his property and rights and declares or complies
with duties to take effect after his death." 14 In other words, the bequest or device must
pertain to the testator. 15 In this case, the monies subject of savings account No. 35342-038
were in the nature of conjugal funds In the case relied on, Rivera v. People's Bank and Trust
Co., 16 we rejected claims that a survivorship agreement purports to deliver one party's
separate properties in favor of the other, but simply, their joint holdings:
xxx xxx xxx
... Such conclusion is evidently predicated on the assumption that Stephenson was
the exclusive owner of the funds-deposited in the bank, which assumption was in turn based
on the facts (1) that the account was originally opened in the name of Stephenson alone and
(2) that Ana Rivera "served only as housemaid of the deceased." But it not infrequently
happens that a person deposits money in the bank in the name of another; and in the
instant case it also appears that Ana Rivera served her master for about nineteen years
without actually receiving her salary from him. The fact that subsequently Stephenson
transferred the account to the name of himself and/or Ana Rivera and executed with the
latter the survivorship agreement in question although there was no relation of kinship
between them but only that of master and servant, nullifies the assumption that
Stephenson was the exclusive owner of the bank account. In the absence, then, of clear
proof to the contrary, we must give full faith and credit to the certificate of deposit which
recites in effect that the funds in question belonged to Edgar Stephenson and Ana Rivera;
that they were joint (and several) owners thereof; and that either of them could withdraw
any part or the whole of said account during the lifetime of both, and the balance, if any,
upon the death of either, belonged to the survivor. 17
xxx xxx xxx
In Macam v. Gatmaitan, 18 it was held:
xxx xxx xxx
This Court is of the opinion that Exhibit C is an aleatory contract whereby, according
to article 1790 of the Civil Code, one of the parties or both reciprocally bind themselves to
give or do something as an equivalent for that which the other party is to give or do in case
of the occurrence of an event which is uncertain or will happen at an indeterminate time. As
already stated, Leonarda was the owner of the house and Juana of the Buick automobile
and most of the furniture. By virtue of Exhibit C, Juana would become the owner of the
house in case Leonarda died first, and Leonarda would become the owner of the automobile
and the furniture if Juana were to die first. In this manner Leonarda and Juana reciprocally
assigned their respective property to one another conditioned upon who might die first, the
time of death determining the event upon which the acquisition of such right by the one or
the other depended. This contract, as any other contract, is binding upon the parties
thereto. Inasmuch as Leonarda had died before Juana, the latter thereupon acquired the
ownership of the house, in the same manner as Leonarda would have acquired the
ownership of the automobile and of the furniture if Juana had died first. 19
xxx xxx xxx
There is no showing that the funds exclusively belonged to one party, and hence it
must be presumed to be conjugal, having been acquired during the existence of the marita.
relations. 20
Neither is the survivorship agreement a donation inter vivos, for obvious reasons,
because it was to take effect after the death of one party. Secondly, it is not a donation
between the spouses because it involved no conveyance of a spouse's own properties to the
other.
It is also our opinion that the agreement involves no modification petition of the
conjugal partnership, as held by the Court of Appeals, 21 by "mere stipulation" 22 and that it
is no "cloak" 23 to circumvent the law on conjugal property relations. Certainly, the spouses
are not prohibited by law to invest conjugal property, say, by way of a joint and several bank
account, more commonly denominated in banking parlance as an "and/or" account. In the
case at bar, when the spouses Vitug opened savings account No. 35342-038, they merely
put what rightfully belonged to them in a money-making venture. They did not dispose of it
in favor of the other, which would have arguably been sanctionable as a prohibited
donation. And since the funds were conjugal, it can not be said that one spouse could have
pressured the other in placing his or her deposits in the money pool.
The validity of the contract seems debatable by reason of its "survivor-take-all"
feature, but in reality, that contract imposed a mere obligation with a term, the term being
death. Such agreements are permitted by the Civil Code. 24
Under Article 2010 of the Code:
ART. 2010. By an aleatory contract, one of the parties or both reciprocally bind
themselves to give or to do something in consideration of what the other shall give or do
upon the happening of an event which is uncertain, or which is to occur at an indeterminate
time.
Under the aforequoted provision, the fulfillment of an aleatory contract depends on
either the happening of an event which is (1) "uncertain," (2) "which is to occur at an
indeterminate time." A survivorship agreement, the sale of a sweepstake ticket, a
transaction stipulating on the value of currency, and insurance have been held to fall under
the first category, while a contract for life annuity or pension under Article 2021, et
sequentia, has been categorized under the second. 25 In either case, the element of risk is
present. In the case at bar, the risk was the death of one party and survivorship of the other.
However, as we have warned:
xxx xxx xxx
But although the survivorship agreement is per se not contrary to law its operation
or effect may be violative of the law. For instance, if it be shown in a given case that such
agreement is a mere cloak to hide an inofficious donation, to transfer property in fraud of
creditors, or to defeat the legitime of a forced heir, it may be assailed and annulled upon
such grounds. No such vice has been imputed and established against the agreement
involved in this case. 26
xxx xxx xxx
There is no demonstration here that the survivorship agreement had been executed
for such unlawful purposes, or, as held by the respondent court, in order to frustrate our
laws on wills, donations, and conjugal partnership.
The conclusion is accordingly unavoidable that Mrs. Vitug having predeceased her
husband, the latter has acquired upon her death a vested right over the amounts under
savings account No. 35342-038 of the Bank of America. Insofar as the respondent court
ordered their inclusion in the inventory of assets left by Mrs. Vitug, we hold that the court
was in error. Being the separate property of petitioner, it forms no more part of the estate
of the deceased.
WHEREFORE, the decision of the respondent appellate court, dated June 29, 1987,
and its resolution, dated February 9, 1988, are SET ASIDE.
No costs.